The annual Venture Capital global survey by Deloitte Touche Tohmatsu (DTT) and the NVCA shows that when it comes to investing in start ups, venture capitalists are cutting back. The survey gathered the opinion of 725 partners in venture capital funds worldwide, including Israel. Despite declining valuations and virtually no exits in 2009, VCs are still investing strong in Israel.
Mark Jensen, national managing partner of Deloitte’s Venture Capital Services, said:
“It’s been a difficult recession but the industry is coping and making adjustments. They’re moving forward and not sitting on their hands waiting for something to happen.”
Green Tech Still on the Rise
Semiconductors and software are seeing a softness in interest, while Green investment seems to be on the rise, according to 60% of the survey respondents.
VCs are Investing Abroad, Asia is the next frontier
52% of the survey respondents are currently investing outside their home countries. 19% of respondents expressed that investment levels will rise in Israel, while 50% believe that investment will increase in Asia (excluding India); 43% in India; 36% in South America; 25% in Europe and the UK; and 17% in North America.
VCs are looking for governments to get involved
66% of venture capitalists would like a tax break from their respective governments. 40% believe that government support for entrepreneurial activity is important; 31% would like governments to encourage more active public markets; and 29 percent believe improved access to private capital sources will help better support innovation.
VCs were asked what policies would help drive venture capital in the next 12 months, and 58% responded that they would like to see the government encouraging institutional investors to invest in venture capital.
“Now is a great time to invest”
According to 51% of the VCs, this statement holds true. Only 6 percent believe that it is not a good time to make investments.
In summary
In the words of Terry McGuire, chairman of the NVCA and co-founder
of Polaris Venture Partners:
“Innovation is abundant on a global basis today and opportunities are alive and growing everywhere. Any country that is prepared to nurture its venture capital and entrepreneurial ecosystem is poised to benefit economically and not necessarily at the expense of another region. This game is one for everyone to win.”
To view the full survey results visit: www.nvca.org/2009_global_VC_survey_quotes.pdf
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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